Financial Half Year Report20 | 21

Contents		 LEM Group
3		

Interim consolidated statementof financial position

4

Interim consolidated income statement

5		Interim consolidated statementof comprehensive income

6		Interim consolidated statementof changes in equity

7

Interim consolidated cash flow statement

8		

Notes to the interim consolidated
financial statements

Interim consolidated statementof financial position

AssetsNotes

in CHF thousands

30.9.2020

31.3.2020

Current assets
Cash and cash equivalents

16’381

19’243

Accounts receivable

59’79558’256Inventories

35’21533’764

1’553

1’332

Income tax receivable

12

Other current assets

3’161

2’828

Total current assets

116’105

115’423

Noncurrent assets
Property, plant and equipment

47’51545’155Right-of-use assets

5’378

5’962

Intangible assets

4’296

4’474

57’05458’277

Deferred tax assets

12

Other noncurrent assets

922

1’023

Total noncurrent assets

115’164

114’891

Total assets

231’269

230’31330.9.2020

31.3.2020

Accounts payable

18’75922’116

Accrued expenses

22’44625’331

Lease liabilities

1’489

1’629

30’257

36’692

Liabilities and equity
Notes

in CHF thousands

Current liabilities

Income tax payable

12

Current provisions

7954

2’288

Interest-bearing loans and borrowings

845’000

9’000

Other current liabilities

780

916

Total current liabilities

119’686

97’971

4’115

4’514

Noncurrent liabilities
Noncurrent lease liabilities
Noncurrent provisions

71’129148

Deferred tax liabilities

123’766

3’020

Other noncurrent liabilities

910’508

7’297

Total noncurrent liabilities

19’518

14’979Total liabilities

139’205

112’950

EquityShare capital

570

570

(980)

(581)

Treasury shares10Reserves

105’050

5’082

Retained earnings

1087’426

112’292

Total equity

92’065117’363

Total liabilities and equity

231’269

230’313LEM Financial Half Year Report 20 | 21

Page 3

Interim consolidated
income statement

April to September
Notes

2020/212019/20in CHF thousands

Sales

144’078

159’054

Cost of goods sold(78’557)(84’722)

Gross margin

65’52174’333

Sales expenses(12’823)(14’581)

Administration expenses(12’495)(13’747)

Research & development expenses(12’972)(14’334)

Other income
Operating profit

11Financial expenses

1’113

90

28’34431’762

(186)

(357)

Financial income

85

108

Exchange effect109(1’189)

28’35130’323

Profit before taxes
Income taxes(4’955)(5’233)

Net profit

23’39525’089Earnings per share, in CHF
Basic & diluted earnings per share

20.53

22.02

LEM Financial Half Year Report 20 | 21

12Page 4

Interim consolidated statementof comprehensive income

April to SeptemberNotes

2020/212019/20

23’39525’089(489)(4’647)in CHF thousands

Net profit for the period recognized in the income statement
Other comprehensive income to be reclassified to profit and loss
in subsequent periods
Currency translation difference
Income tax
Total other comprehensive income to be reclassified to profit and loss
in subsequent periods

57312

(432)

(4’335)(3’055)(6’225)

Other comprehensive income not to be reclassified to profit and loss
in subsequent periods
Remeasurement gains/(losses) on defined benefit plans
Income tax

9428

679

Total other comprehensive income not to be reclassified to profit and loss
in subsequent periods(2’627)(5’546)

Other comprehensive income/(loss) for the period, net of tax(3’059)(9’881)

Total comprehensive income for the period

20’33615’208LEM Financial Half Year Report 20 | 21

Page 5

Interim consolidated statementof changes in equity

Attributable to shareholders
in CHF thousands

Notes

Share
capitalTreasurysharesCapitalreserve

Translation
reserve

Retainedearnings

Totalequity

1 April 2019

570

(983)

12’926(1’310)101’922113’125

Net profit for the period
Other comprehensive income/(loss)(4’335)

Total comprehensive income(4’335)

Dividends paid

10

Movement in treasury shares

1025’089

25’089(5’546)(9’881)

19’54315’208(47’855)(47’855)(88)

88(59)(59)

30 September 2019570

(1’070)13’013(5’645)73’55080’4181 April 2020

570

(581)

12’524(7’441)112’292

117’363

Net profit for the period
Other comprehensive income/(loss)(432)

Total comprehensive income(432)

Dividends paid

10

Movement in treasury shares

10

30 September 2020

LEM Financial Half Year Report 20 | 21570

Page 6(399)

399

(980)

12’923(7’874)23’39523’395(2’627)(3’059)20’76820’336(45’580)(45’580)

(55)

(55)

87’42692’065

Interim consolidated
cash flow statement

April to SeptemberNotes

2020/212019/20

Profit before taxes

28’35130’323Adjustment for noncash items

7’294

8’494

(9’230)(3’581)in CHF thousands

CASH FLOW FROM OPERATING ACTIVITIESInterest received/paid and taxes paid
Cash flow before changes in net working capital

26’41435’236

Cash flow from changes in net working capital(12’048)(5’290)14’36629’946(6’647)(6’253)

Cash flow from operating activities
CASH FLOW FROM INVESTING ACTIVITIESInvestment in fixed assets
Investment in intangible assets

(91)

(81)

Increase in other assets

(74)

(298)

Decrease in other assets
Cash flow from investing activities

207

140

(6’605)(6’492)(4’338)

CASH FLOW FROM FINANCING ACTIVITIESTreasury shares acquired10(4’878)

Treasury shares divested

104’824

4’278(830)(2’205)(47’855)

Payment of lease liabilities
Dividends paid to the shareholders of LEM HOLDING SA

10(45’580)

Increase in financial liabilities

883’000

60’500Decrease in financial liabilities

8(47’000)(28’500)

Cash flow from financing activities(10’465)(18’120)

Change in cash and cash equivalents(2’704)5’334

Cash and cash equivalents at the beginning of the period

19’243

12’538Exchange effect on cash and cash equivalents
Cash and cash equivalents at the end of the period

LEM Financial Half Year Report 20 | 21

Page 7(158)(749)

16’381

17’123

Notes to the interim
consolidated financial
statements
1.
General information
LEM Group (the Group) is a leading company in electrical measurement. LEM engineers best-in-class solutions for energy andmobility, ensuring that its customers’ systems are optimized, reliable and safe.
The parent company of LEM Group is LEM HOLDING SA (the Company), which is a limited company incorporated in Switzerland.
Following the move of LEM HOLDING SA head-office on 9 June 2020, the new registered office is Chemin des Aulx 8, 1228
Plan-les-Ouates.
2.
Significant accounting principles
These unaudited consolidated financial statements for the six months ended on 30 September 2020 have been prepared inaccordance with International Accounting Standard (IAS) 34 “Interim Financial Reporting”. They do not include all the information and disclosures presented in the annual consolidated financial statements and should therefore be read in conjunction
with those for the year ended 31 March 2020.
The accounting and valuation policies are consistent with those applied in preparing the annual consolidated financial statements for the year 2019/20.
The preparation of the interim consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and related disclosuresat the date of the interim financial statements. These estimates are based on management’s best knowledge of current eventsand actions that the Group may undertake in the future. However, actual results could differ from those estimates.
The financial information is presented in thousands of CHF. The totals are calculated with the original unit amounts, which could
lead to rounding differences. These differences in thousands of units are not changed in order to keep the accuracy of theoriginal data.
Several standards have been amended with effect from January 1, 2020, which have no material impact on Group’s FinancialStatements. These include “Definition of a Business” (Amendments to IFRS 3), “Definition of Material” (Amendments to IAS 1and IAS 8) and “Interest Rate Benchmark Reform” (Amendments to IFRS 9, IAS 39 and IFRS 7).

LEM Financial Half Year Report 20 | 21

Page 8

Notes to the interim consolidated
financial statements

3.
Exchange rates
The exchange rates for the most significant currencies are as follows:
Income statement of
2020/21

Income statement of
2019/20

Balance sheet
30.9.2020

Balance sheet
31.3.2020

Average rate in CHF

Average rate in CHF

Half-year rate in CHF

Year-end rate in CHF

BGN

0.546

0.568

0.552

0.541

CNY

0.134

0.144

0.135

0.136

DKK

0.143

0.149

0.145

0.142

EUR

1.068

1.112

1.080

1.059

GBP

1.192

1.252

1.186

1.191

JPY

0.00880.00920.00870.0089

MYR

0.221

N/A

0.221

0.223

RUB

0.013

0.015

0.012

0.012

USD

0.942

0.994

0.921

0.963

Currency

4.
Changes in scope of consolidation
On 18 June 2020, LEM International SA and LEM Switzerland SA merged with retroactive effective date as of 1 April 2020.

5.
Segment information
Business segment information
Industry

AutomotiveLEM Groupin CHF thousands

2020/212019/20

2020/212019/20

2020/212019/20

Sales

112’601

123’936

31’47735’118144’078

159’054EBIT

24’39327’532

3’950

4’230

28’34431’762

6.
Revenue information
Regional information
Industry
2020/21in CHF thousands

Automotive

2019/20

2020/212019/20

LEM Group
2020/212019/20

Sales
China

41’83039’98912’362

14’721

54’19254’710Europe39’08845’584

3’650

2’641

42’73848’225

North America

10’86113’648

3’300

5’727

14’161

19’375Rest of World

20’822

24’716

12’16512’02932’98736’745112’601

123’936

31’47735’118144’078

159’054

Total

LEM Financial Half Year Report 20 | 21

Page 9

Notes to the interim consolidated
financial statements

Geographical information
Chinain CHF thousands

Sales

USAJapan

2019/20

2020/212019/20

2020/212019/20

2020/212019/20

54’19254’71013’341

18’24514’27715’60811’647

13’840Italy
in CHF thousands

Germany

2020/21

Switzerland

Rest of the world

LEM Group

2020/212019/20

2020/212019/20

2020/212019/20

2020/212019/20

4’140

5’436

1’696

1’809

44’78449’407144’078

159’054

Sales

7.
Current and noncurrent provisions
Warranty and customer claimsProvisions for warranty and customer claims have been estimated based on past experience and the risk assessment of management. The warranty provision is expected to be used over the next five years.
At 30 September 2020, the provisions decreased by CHF 0.4 million.
Litigations and consumption taxes
Despite the care that LEM applies in the separation process with personnel, such separation may result in legal conflicts. TheGroup will defend its case and management estimates the reasonable risk to be adequately provided for.
The Company operates in multiple jurisdictions with complex legal and tax regulatory environments. In the frame of the continuous improvement of its processes and systems, LEM has reviewed the consumption taxes in several countries. It has appearedthat some of LEM’s subsidiaries may not have been fully compliant with their local consumption tax regulations. As a consequence, LEM has estimated consumption tax provisions according to management best judgment. Some of these positions
are inherently uncertain and include the interpretation of local regulations applied to complex transactions.
8.
Current financial liabilities
LEM Group increased its financial short-term liabilities to CHF 45.0 million (CHF 9.0 million at 31 March 2020) via short-term
credit lines in order to finance the CHF 45.6 million dividend payment of June 2020.
9.
Other noncurrent liabilities
The increase of the noncurrent liabilities is mainly linked to the increase of the retirement benefit obligations due to the discount rate decrease from 0.6% to 0.25%, slightly compensated by the increase of the fair value of plan assets of CHF 1.8
million impacting the other comprehensive income by CHF 3.1 million on a pre-tax basis. At 30 September 2020, the fair valueof plan assets is lower than the defined benefit obligations resulting in a net pension liability of CHF 9.0 million.

LEM Financial Half Year Report 20 | 21Page 10

Notes to the interim consolidated
financial statements

10. Equity
At the shareholders’ meeting held in Fribourg on 9 June 2020, the shareholders approved the distribution of an ordinary dividend of CHF 40.00 per share resulting in an estimated payout of CHF 45.6 million. The gross dividend effectively paid on 18June 2020 amounted to CHF 45.6 million (prior year: ordinary dividend of CHF 42.00; total of CHF 47.9 million).
In the frame of its market-making contract, LEM holds own shares. At 30 September 2020, the Group held 574 shares (31 March2020: 556).

11. Operating profit
Our sales decreased by -9.4% to CHF 144.1 million in the first half of 2020/21; at constant exchange rates, this represents asales decrease of -4.4%.
Our gross margin stood at 45.5%, slightly down from 46.7% in the first half of 2020/21, with an EBIT amounting to CHF 28.3 million (decrease of -10.8% in the first half of 2020/21). Our operating profit margin for the first six months of 2020/21 was 19.7%,
compared with 20.0% a year earlier. The challenging economic environment reduced sales volumes, impacting the operating
profit in value. In the meantime, the operational expenses were strictly controlled enabling the profitability to remain stable.

LEM Financial Half Year Report 20 | 21

Page 11

Notes to the interim consolidated
financial statements

12. Income taxes
Income tax expense is calculated based on the best estimate of the applicable annual income tax rate expected for the full year.
The Group operates in multiple jurisdictions with complex legal and tax regulatory environments. In certain of these jurisdictions, the Group has taken income tax positions that management believes are supportable and are intended to withstandchallenge by tax authorities. Some of these positions are inherently uncertain and include those relating to transfer pricing
matters and the interpretation of income tax laws applied to complex transactions. The Company periodically reassesses its taxpositions. Changes to the financial statement recognition, measurement, and disclosure of tax positions are based on management’s best judgment given any changes in the facts, circumstances, information available and applicable tax laws. Considering
all available information and the history of resolving income tax uncertainties, the Group believes that the ultimate resolution ofsuch matters will not have a material effect on its financial statements.
Differences between the final tax outcome and the amounts that were initially recorded impact the income and deferred taxes
in the period in which such determinations are made. The Group calculates its expected average tax rate as a weighted averageof the tax rates in the tax jurisdictions in which the Group operates.
At 17.5%, the tax rate remains fairly stable compared to the first half-year 2019/20.
In 2019/20, the intellectual property from LEM Intellectual Property SA based in Fribourg was transferred to LEM International
SA based in Geneva and to LEM Electronics China Co. Ltd generated additional income taxes which have been partially paid
during the period for an amount of CHF 6.4 million.

LEM Financial Half Year Report 20 | 21Page 12

Notes to the interim consolidated
financial statements

13. Financial assets and liabilities
Financial assets
30.9.2020
Fair value

31.3.2020
Fair value

Amortizedcost

Cash and cash equivalents

16’381

19’243

X

Accounts receivable

59’79558’256X

Derivative financial instruments – current

180320

Other current financial assets

7513X
X

in CHF thousands

Other noncurrent financial assets

X869

1’023

77’30078’85530.9.2020
Fair value

31.3.2020
Fair value

Other financial liabilities

Accounts payable

18’75922’116

X

Accrued expenses

22’44625’331

X

Lease liability

5’604

6’143

X

Other current financial liabilities

45’000

9’000

X

Total

91’80962’589Total

At fair value
through profit andloss

Financial liabilities

in CHF thousands

At fair value
through profit andloss

Changes in liabilities arising from financing activities
Cashimpactin CHF thousands

Interest-bearing loans and borrowings
Derivative financial instruments

Non-cash
impact

1.4.2019

Cash flows
Inflow

Cash flows(Outflow)

8’000

60’500(28’500)

168

Total

8’168

60’500(28’500)

Cashimpact

1.4.2020

Cash flows(Outflow)

Interest-bearing loans and borrowings

9’000

83’000(47’000)

Derivative financial instruments

(320)

Total

8’680

LEM Financial Half Year Report 20 | 21

Page 1383’000Currency
effect30.9.201940’00064

23264

40’232

Non-cash
impactCash flows
Inflowin CHF thousands

Fair valuechanges andOthers(47’000)

Fair valuechanges andOthers

Currency
effect30.9.2020

45’000140(180)

140

44’820Notes to the interim consolidated
financial statements

The management assessed that fair value level of cash and cash equivalents, accounts receivables, other current and noncurrent assets, accounts payables, accrued expenses and other current and noncurrent liabilities that are not measured at fairvalue approximate their carrying amounts in view of their short-term nature and are consequently not separately disclosed.
The Group enters into derivative transactions such as currency risk reversal and forward contracts to hedge the USD, EUR andJPY risks.
The purpose of these currency hedges is to manage the currency risks arising from the Group’s operations.
It is the Group’s policy that no derivatives for speculative purposes shall be entered into.
The main risks arising from the Group’s financial instruments are foreign currency risks and credit risks, whereas the others areof minor or no impact.
The Board of Directors reviews and agrees policies for managing each of those risks.
The Group’s financial assets at fair value amount to CHF 180 thousand per 30 September 2020 (financial assets of CHF 320 thousand
per 31 March 2020), all classified under level 2.
During the last reporting period, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers
into and out of Level 3 fair value measurements.

14. Events after the balance sheet date
The Board of Directors and Senior Management are not aware of any significant events up to the date of approval of theinterim consolidated financial statements on 29 October 2020 that would require an adjustment in carrying amounts of theGroup’s assets and liabilities.

LEM Financial Half Year Report 20 | 21Page 14

Notes to the interim consolidated
financial statements

Financial calendar
The financial year runs from 1 April to 31 March4 February 2021

Third-quarter results 2020/21

19 May 2021

Year-end results 2020/21

24 June 2021

Annual General Meeting of Shareholders for the financial
year 2020/21

1 July 2021

Dividend ex-date

6 July 2021

Dividend payment date

LEM Financial Half Year Report 20 | 21

Page 15Contact
Andrea Borla (CFO)
Phone: +41 22 706 12 50
E-mail: investor@lem.com
Address
LEM HOLDING SA
Chemin des Aulx 81228 Plan-les-Ouates
Geneva, Switzerland
www.lem.com

LEM HOLDING SA
Chemin des Aulx 81228 Plan-les-Ouates
Geneva, Switzerland
www.lem.com

Financial Half Year Report 20 | 21